Strike 3 Holdings, LLC v. Doe

Filing 21

ORDER - Plaintiff Strike 3 Holdings, LLC's appeal (Doc. No. 14 ) of Magistrate Judge David T. Schultz's April 30, 2018 Order is GRANTED. Magistrate Judge David T. Schultz's April 30, 2018 Order (Doc. No. 13 ) is VACATED. Plaintiff's Motion for Leave to Serve a Third-Party Subpoena Prior to a Rule 26(f) Conference (Doc. No. 4 ) is GRANTED. (Written Opinion) Signed by Judge Donovan W. Frank on 9/4/2018. See Order further details. (las)

UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA

Strike 3 Holdings, LLC,

Civil No. 18-774 (DWF/DTS)

Plaintiff,
v.

ORDER

John Doe, subscriber assigned IP address
66.41.66.112,
Defendant.

This matter is before the Court on Plaintiff Strike 3 Holdings, LLC’s objection
(Doc. No. 14) to Magistrate Judge David T. Schultz’s April 30, 2018 Order (Doc.
No. 13).

Normally, the Court modifies or sets aside any portion of the Magistrate

Judge’s order found to be clearly erroneous or contrary to law.
§ 636(b)(1)(A); Fed. R. Civ. P. 72(a); Local Rule 72.2(a).
deferential standard.”

See 28 U.S.C.

This is an “extremely

Reko v. Creative Promotions, Inc., 70 F. Supp. 2d 1005, 1007 (D.

Minn. 1999). “A finding is ‘clearly erroneous’ when although there is evidence to
support it, the reviewing court on the entire evidence is left with the definite and firm
conviction that a mistake has been committed.”

Chakales v. Comm’r of Internal

Revenue, 79 F.3d 726, 728 (8th Cir. 1996) (quoting United States v. United States
Gypsum Co., 333 U.S. 364, 395 (1948)).

Here, Plaintiff’s ex parte motion seeks leave

to serve a subpoena under Federal Rule of Civil Procedure 45 to learn the identity of the
Defendant. This information can only be provided by Defendant’s Independent Service
Provider (“ISP”), and without this information, Plaintiff will be unable to pursue this

case.

Because of the dispositive nature of the Magistrate Judge’s Order, Plaintiff argues

that the Order should be reviewed de novo. 1

The Court agrees, but notes that the result

would be the same under either standard of review.
Plaintiff owns and distributes adult motion pictures over the internet.

Plaintiff

alleges that the unnamed Defendant, a subscriber with an identified internet protocol
(“IP”) address, infringed Plaintiff’s copyrights by downloading and distributing 59 of
Plaintiff’s motion pictures.
by his or her IP address.

Plaintiff asserts that the only way to identify Defendant is

Accordingly, Plaintiff filed an ex parte motion for leave to

serve a third-party subpoena on Defendant’s ISP, Comcast Cable Communications, LLC
(“Comcast”), prior to the Rule 26(f) conference.

(Doc. No. 4.)

The Magistrate Judge denied Plaintiff’s motion and in his Order recognized a
conflict between the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512, the
Communications Act, 47 U.S.C. § 551, and Federal Rule of Civil Procedure 45.

The

Magistrate Judge concluded that a conflict between the relevant statutes compels the
denial of Plaintiff’s ex parte motion.

In reaching this conclusion, the Magistrate Judge

weighed Plaintiff’s property interest against Defendant’s privacy interest and found that
the discovery sought directly collides with federal privacy protections.

1

“Any pretrial matter properly referred to a magistrate judge must be categorized
under Rule 72 as either ‘dispositive’ or ‘nondispositive’ for purposes of the standard of
review to be exercised by the district judge.” C. Wright, A. Miller, FEDERAL PRACTICE
AND PROCEDURE § 3068.2 (2d ed. 2018).
2

Plaintiff objects to the Magistrate Judge’s Order, arguing that it gives undue
weight to Defendant’s privacy based on a misreading of the Communications Act.
Instead, Plaintiff submits that the Communications Act permits a subpoena to identify the
Defendant, pointing to an exception that allows for the release of subscriber information:
Except as provided in paragraph (2), a cable operator shall not disclose
personally identifiable information concerning any subscriber without the
prior written or electronic consent of the subscriber concerned and shall
take such actions as are necessary to prevent unauthorized access to such
information by a person other than the subscriber or cable operator.
(2) A cable operator may disclose such information if the disclosure is—
…
(B) . . . made pursuant to a court order authorizing such disclosure, if
the subscriber is notified of such order by the person to whom the order is
directed.
47 U.S.C § 551(c)(1) & (c)(2).

Plaintiff also cites to cases where courts have authorized

subpoenas pursuant to court orders under the Communications Act and suggests that,
considering the sensitivity of the content of Plaintiff’s motion pictures, the Court should
issue a protective order similar to the one issued by Magistrate Judge Thorson in Strike 3
Holdings, LLC v. Doe, Civ. No. 18-777 (JRT/BRT), 2018 WL 2078707, at *4 (D. Minn.
May 4, 2018).
Generally, parties “may not seek discovery from any source before the parties
have conferred as required by Rule 26(f), . . . except when authorized by these rules, by
stipulation, or by court order.”

Fed. R. Civ. P. 26(d)(1).

District courts in the Eighth

Circuit have applied a “good cause” standard to determine whether expedited discovery is
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appropriate.
2008).

See Wachovia Sec. v. Stanton, 571 F. Supp. 2d 1014, 1049 (N.D. Iowa

Courts consider the following factors when deciding whether to permit early

discovery to identify an alleged anonymous copyright infringer:
(1) the concreteness of the plaintiff’s showing of a prima facie claim of
actionable harm, (2) the specificity of the discovery request, (3) the absence
of alternative means to obtain the subpoenaed information, (4) the need for
the subpoenaed information to advance the claim, and (5) the objecting
party’s expectation of privacy.
Arista Records, LLC v. Doe 3, 604 F.3d 110, 119 (2d Cir. 2010).
Courts in this District have been divided on the propriety of early discovery in
cases similar to this one. Compare Strike 3 Holdings, L.L.C. v. Doe, Civ. No. 18-773
(JRT/DTS), slip op. at 7 (D. Minn. Apr. 30, 2018) (denying motion for leave to serve a
third-party subpoena) (Schultz, Mag. J.), appeal filed (May 11, 2018), and Strike 3
Holdings, L.L.C. v. Doe, Civ. No. 18-768 (DSD/FLN), 2018 WL 1924455, at *3 (D.
Minn. Apr. 24, 2018) (same) (Noel, Mag. J.), with Strike 3 Holdings, L.L.C. v. Doe, Civ.
No. 18-777 (JRT/BRT), 2018 WL 2078707, at *1-3 (D. Minn. May 4, 2018) (finding
good cause under Arista Records factors to allow early discovery) (Thorson, Mag. J.),
Strike 3 Holdings, LLC v. Doe, Civ. No. 18-771 (DWF/HB), 2018 WL 2278110, at *5
(D. Minn. May 18, 2018) (Bowbeer, Mag. J.) (granting ex parte motion for leave to file a
third-party subpoena; applying Arista Records factors and finding good cause to allow
early discovery), Strike 3 Holdings, LLC v. Doe, Civ. No. 18-778 (PJS/HB), 2018 WL
2278111, at *5-6 (D. Minn. May 18, 2018) (Bowbeer, Mag. J.) (granting motion for
third-party subpoena with procedural safeguards); Strike 3 Holdings, LLC v. Doe, Civ.
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No. 18-779 (WMW/SER), slip op. at 8-10 (D. Minn. May 25, 2018) (Rau, Mag. J.)
(granting motion for third-party subpoena with procedural safeguards).
After careful consideration, the Court concludes that the best approach in
determining whether to grant Plaintiff’s ex parte motion and allow early discovery is to
use the framework laid out in Arista Records.
Plaintiff’s motion.
infringement.

Based on those factors, the Court grants

First, Plaintiff has stated an actionable claim for copyright

Second, Plaintiff’s discovery request is specific because it seeks only

Defendant’s name and address.

Third, there are no alternative ways to obtain the

information. The Court acknowledges that Comcast is a mere conduit of data between
two internet users, and, as such, the DMCA does not authorize a subpoena to identify the
alleged infringer. 2

However, the DMCA does not prohibit the issuance of a subpoena,

2

In In re Charter Communications, the Eighth Circuit considered whether “the
enforcement of a § 512(h) subpoena violates the privacy protections for cable subscribers
in the Communications Act” and explained that the provision “does not allow a copyright
owner to request a subpoena for an ISP which merely acts as a conduit for data
transferred between two internet users.” 393 F.3d 771, 775-77 (8th Cir. 2005).
Importantly, however, the Eighth Circuit went on to endorse the procedure employed by
Plaintiff in this case, noting that:
copyright owners cannot deter unlawful peer-to-peer file transfers unless
they can learn the identities of persons engaged in that activity. However,
organizations . . . can also employ alternative avenues to seek this
information, such as “John Doe” lawsuits. In such lawsuits, many of
which are now pending in district courts across the country, organizations
. . . can file a John Doe suit, along with a motion for third-party discovery
of the identity of the otherwise anonymous “John Doe” defendant.
Id. at 775 n.3.
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and Rule 45 remains an avenue for such discovery.

See Strike 3 Holdings, L.L.C., 2018

WL 2078707, at *2; Strike 3 Holdings, LLC, 2018 WL 2278119, at *4. 3

And as

explained above, Rule 26(d)(1) permits the Court to authorize early discovery provided
good cause is shown.
cannot proceed.

Fourth, without the information on Defendant’s identity, the case

Fifth, the Court concludes that Defendant’s expectation of privacy is

outweighed by Plaintiff’s right to use the judicial process to pursue its copyright claims.
That being said, the Court is cognizant of Defendant’s privacy concerns, namely that the
owner of the cited IP address may not be the actual infringer and yet could be implicated
in a case involving sensitive subject matter.

With these valid concerns in mind, the

Court will issue a limited protective order to protect the rights of the unnamed subscriber.
Based on the Court’s review, both under a de novo review and the more
deferential clearly erroneous or contrary to law standard, the Court finds that
consideration of the Arista Records factors shows good cause for the early discovery
requested by Plaintiff. The Court also recognizes the unique privacy issues in this case
and determines that it is appropriate to grant a limited protective order as described below
to protect the owner of the IP address.
1.

Accordingly, IT IS HEREBY ORDERED that:

Plaintiff Strike 3 Holdings, LLC’s appeal (Doc. No. [14]) of Magistrate

Judge David T. Schultz’s April 30, 2018 Order is GRANTED.

3

The Court also notes that although the Communications Act prohibits a cable
operator from disclosing a subscriber’s personally identifiable information, it also provides
an exception when the disclosure is made pursuant to a Court order and the subscriber is
notified. 47 U.S.C. § 551(c)(2)(B).
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2.

Magistrate Judge David T. Schultz’s April 30, 2018 Order (Doc. No. [13]) is

VACATED.
3.

Plaintiff’s Motion for Leave to Serve a Third-Party Subpoena Prior to a

Rule 26(f) Conference (Doc. No. [4]) is GRANTED as follows:
a.

Plaintiff may serve a subpoena pursuant to Federal Rule of

Civil Procedure 45 on Defendant’s ISP, Comcast Cable Communications,
LLC, seeking the name and address of the subscriber assigned to the IP
address identified in the Complaint for the time periods of the alleged
infringing activity outlined in Doc. No. 1-1, Exhibit A to Plaintiff’s
Complaint.
b.

The subpoena must provide a minimum of sixty (60) days’

notice before any production and shall be limited to one category of
documents identifying the particular subscriber identified in the Complaint.
The requested information shall be limited to the name and address of the
subscriber during the time period of the alleged infringing activity referenced
in the Complaint. Comcast may seek a protective order if it determines
there is a legitimate basis for doing so.
c.

Comcast shall have fourteen (14) calendar days after service of

the subpoena to notify the subscriber that his or her identity has been
subpoenaed by Plaintiff. The subscriber whose identity has been

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subpoenaed shall then have forty-five (45) calendar days from the date of the
notice to seek a protective order or file any other responsive pleading.
d.

Plaintiff shall serve a copy of this Order with any subpoena

obtained and served pursuant to this Order to Comcast. Comcast, in turn,
must provide a copy of this Order along with the required notice to the
subscriber whose identity is sought pursuant to this Order. No other
discovery is authorized at this time.
e.

Plaintiff must not publicly disclose the information until

Defendant has the opportunity to file a motion with the Court to be allowed
to proceed in this litigation anonymously and that motion is ruled on by the
Court. If Defendant fails to file a motion for leave to proceed anonymously
within forty-five (45) calendar days after his or her information is disclosed
to Plaintiff’s counsel, this limited protective order will expire. If Defendant
includes identifying information in his or her request to proceed
anonymously, the Court finds good cause to order the papers temporarily
filed under seal until the Court has the opportunity to rule on the request and
to consider whether such materials should remain under seal.

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f.

On or before December 1, 2018, Plaintiff shall file a Status

Report with the Court briefly outlining the progress of the discovery
authorized by this Order. The Status Report must not include any
identifying information.
Dated: September 4, 2018

s/Donovan W. Frank
DONOVAN W. FRANK
United States District Judge

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